Norwegian University of Life Sciences
Explanatory case study of the research cooperation between IKBM
at UMB and TINE SA
Anastasia Kudryavtseva
Department for Economics and Resource Management
Master Thesis 2011 - 30 credits
1
Acknowledgements
This paper is the final part of the Master studies in economics and administration at the University of Life Sciences in Ås. I would like to thank many individuals who helped me during the work with my master thesis. First of all, I would like to thank my supervisor, Bernt Aarset. He has helped me a lot with the choice of the topic for the thesis, as well as with establishing contacts with other professors at UMB. He has guided me through the whole process of working with the thesis by giving good comments, expertise and insight.
I would like to thank the respondents from TINE SA, Eirik-Selmer Olsen, Anne- Grethe Johansen and Johanne Brendehaug for the good information provided for the research. By taking interviews, making analysis and studying different scientific papers I have gained lot of new knowledge and practical experience of conducting interviews. This was my first time conducting a real interview and the experience was very exciting.
Special thanks to Professor Roger K. Abrahamsen and senior adviser Colin Murphy who both helped me during my work by giving necessary information for the thesis.
Finally I want to thank my family. Thank you for your love and support.
Oslo 15.june 2011
Anastasia Kudryavtseva
2
Abstract
“Coming together is a beginning. Keeping together is progress. Working together is success.”
Henry Ford Background
The topic of university industry- relationships has been an issue for the studying for the last two decades. It has been conducted practical studies and written a great number of scientific papers which are aimed at analyzing different aspects of U-I relationships. The topic of University-Industry Cooperation (UIC) is an interesting topic for the research for a number of reasons. The two actors have basically significantly different “purposes of existence”. While the industry is more aiming at obtaining the commercial results, the universities are more interested in basic research, production and dissemination of knowledge. Industry is being forced to work under strict time limits and is often not interested to announce research results to the public. University researchers are driven by the individual interest in producing new knowledge. The challenge for both actors is to find a junction point where both actors could collaborate with positive outcomes for both parts. General difference in perceptions and incentives for the cooperation often arise problems in gaing a positive outcome from the collaboration. The point of this case study would be obtaining a deeper understanding on how both actors manage to communicate with one another without interest conflicts and what are the reasons of the success of the research collaboration.
The purpose of the study
In this paper it will be taken a closer look at the special case of research cooperation between University of Life Sciences in Ås (Department for chemistry, biotechnology and food science) and the Norwegian dairy company Tine SA, which remains one of the biggest actors on the market in Norway. The paper is an explanative study which will describe the cooperation between academia and industry and find out the reasons for the success of this cooperation.
The reason for why especially these two actors were chosen for the study is bacause the cooperation between these two actors has a long and successful history which is quite a unique case. The process of research collaboration between the Department of chemistry, biotechnology and food science ( in the following called IKBM) and TINE SA is a successful
3 case of “win-win” cooperation where both partners gain significant advantages from working together. First of all, I would like to describe the structure of the cooperation: practical organization, main knowledge transfer channels and psychological factors. Secondly, I would like to look closer at the exact courses of the success. I have therefore chosen to work on the following problem:
Materials and method
In this paper I have used both primary and secondary data materials. Data collections were primarily conducted thorough personal meetings and interviews with both representatives from IKBM and TINE SA. It has been taken 4 semi-structured interviews with one representative form IKBM and the three representatives from TINE SA. The interviews were conducted in norwegian as it was easier for the respondents. The interviews were afterwards translated by me into English. Additionally, I have used scientific papers as secondary information.
Results and conclusion
The paper gives the description of TINE SA –IKBM relationships and the reasons for the success of this cooperation. The explanative study of research cooperation between IKBM and TINE SA has shown interesting results. The study revealed the main reasons for success and these turned out to be the following: historical reasons, good project management, strong personal relationships, strong research base at both actors, clear understating of each others‟
environment and needs, trust and no hidden agendas, flow of graduates and clear policy on publication and IPRs.
Key words
Knowledge-based economy, research cooperation, industry –university relationship, dairy industry, innovation.
Qualitative analysis of the successful research cooperation between IKBM at UMB and TINE SA: general description and reasons for success.
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Table of contents
Acknowledgements………...1
Abstract……….. 2
Table of contents………...4
List of table and figures ………...5
1.0 Introduction………...6
1.1 BACKGROUND………...7
1.2 UMB/IKBM –TINE –GENERAL OVERVIEW………..8
1.3 THE STRUCTURE OF THE PAPER………....12
2.0 Theoretical framework…… ………...13
2.1 INTRODUCTION OF THE THEORETICAL FRAMEWORK……….13
2.2 THE SUBJECT OF KNOWLEDGE-BASED ECONOMY AND ITS CHARACTERISTICS………13
2.2.1 KNOWLEDGE-BASED ECONOMY AND OECD COUNTRIES………...15
2.2.2 SHORT OVERVIEW OVER INNOVATION POLICY IN NORWAY………..17
2.3 STRATEGIC ALLIANCE BETWEEN INDUSTRY AND ACADEMIA AND ITS CHARACTERISTICS (UNIVERSITY-INDUSTRY RELATIONSHIP SCHEMA)...20
2.4 SUMMARY OF THE THEORETICAL FRAMEWORK………...29
3.0 Method………...30
3.1 RESEARCH DESIGN………...31
3.1.1 QUALITATIVE ANALYSIS………..32
3.1.2 CASE STUDY………...33
3.2 DATA COLLECTION………...33
3.2.1 PRIMARY DATA………...33
3.2.2 SECONDARY DATA………...37
3.3 DATA CODING……….. ………...37
3.4 DATA‟S VALIDITY AND RELIABILITY………...38
3.5 ANALYSIS OF THE INTERVIEWS………...39
3.6 CHALLENGES AND LESSONS LEARNED FROM THE INTERVIEWS………...40
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4.0 Results and analysis………...41
4.1 IKBM AND TINE SA-AND OLD “FRIENDSHIP” STORY………...41
4.2 THE ORGANIZATION OF THE RESEARCH COOPERATION TODAY………...44
4.2.1 ORGANIZATIONAL FACTORS………...44
4.2.2 UNIVERSITY-INDUSTRY RELATIONSHIPS ALTERNATIVES………...52
4.2.3 PSYCOLOGICAL FACTORS………...58
4.3 REASONS FOR SUCCESS………...59
4.4 SHORT SUMMARY………...63
5.0 Conclusion………...64
References………...65
List of tables and figures Figure 1: University-Industry Relationship schema………...23
Table 1: Stages in the interview process………...34
Table 2: List over the interviewees………...37
Table 3: FoU organization in TINE SA………... 45
Appendix1: Interview guide for TINE researcher Anne-Grethe Johansen…………...69
Appendix 2: Interview guide for Professor Roger K. Abrahamsen………...70
Appendix 3: Interview guide for TINE FoU director Eirik-Selmer Olsen…………...72
Appendix 4: Interview guide for TINE FoU chief Johanne Brendehaug………...74
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1.0 Introduction
The purpose if this case study is to get a deeper understanding on how the research cooperation between the Norwegian University of Life Sciences in Ås (Department for chemistry, biotechnology and food science) and the Norwegian dairy company Tine SA is functioning in practice. The main intention is to analyze why the cooperation is as successful as it is and describe how both parts are cooperating on the issues of scientific research: what channels they choose to communicate with each other, how the transfer of knowledge happen between the parts, expectations they have from each other‟s work, requirements they impose on each other and what are the general experiences form previous research cooperation.
Motivation for the election of the research topic came from the informal conversation with UMB senior advisor Colin Murphy. He expressed the idea that UMB “wishes to know” more about its industry partners and that there is a desire to find out best practices on how to collaborate with industry partners in the most effective way. The case of research collaboration with TINE SA came up almost immediately as both actors have been in the research collaboration for a very long time and it is perceived to be rather successful. The primary idea was to look at some specific project. This could potentially bring the following difficulties; firstly, many projects are carried out under confidentiality clauses and this could make it difficult to get access to the necessary information; secondly- this could give information bias in the study. The choice of the topic fell therefore on the analysis of the more general and overall study of the research collaboration between IKMB at UMB and TINE SA.
The case of multi-institutional networks between industry and academia is a set of relationships which often have complications in them. These complications might include differing priorities and perspectives, mistrust, bad project management and so forth. Very few, especially new started relationships work unproblematic and “smoothly”.
This case study shows a successful case of cooperation which can serve as a “learning” base for other University-Industry relationships. Though the case can be described as a quite specific one, because of the special environment in which the alliance was formulated. TINE SA is the leading dairy industry in Norway and IKBM has the biggest dairy research base in Norway. It would be rather strange if the only two actors which work in the same field, would not cooperate on the common research issues. It was natural for both of them to search contact
7 with one another. But there are definitely some reasons which make the successful research cooperation between IKBM and TINE worth studying and we can therefore draw important conclusions for what other actors can learn from this cooperation. These reasons will be closer discussed in chapter 4.
I would like first to give an overview over the general trends on the topic of research collaboration and also particular trends in Norway. Afterwards that there will be given a general overview over UMB and TINE “relationship” today.
1.1 Background
The focus on university –industry cooperation activities has been raised dramatically for the last two decades. The markets are becoming more competitive and the consumers are becoming more demanding. These tendencies foster industry to innovate even faster than before. In order to strengthen its profitability and to protect its competitive advantage, firms often decide to outsource its R&D activities. Industry “understood” that it gains more creativity and innovative products by working together with research institutions.
Collaboration gives the companies an opportunity to exploit its capabilities and therefore to be more innovative. Universities today are seen as important actors for the economical development and they got extra pressure as an effect of governmental policies to be more effective, to conduct more market relevant research of high quality and relevance.
Universities get the stimuli to conduct applied research, they get governmental economical support and more value on the educational “market”.
According to D. Elmuti, M. Abebe and M. Nicolosi (2005) strategic alliances between corporations and academic institutions are worth studying for four key reasons: first, these alliances are growing in significance in terms of producing various patents, prototypes, and licenses through their research projects. They are also important from the standpoint of global competitiveness and increasing demand for innovation in products and processes. The other reason is their increasing vitality in serving as a stepping stone for a more complex collaboration that involves multiple firms, universities and other research centers. These
8 alliances are also playing an important role in the national R&D policy, and effect the distribution of recourses considerably1.
My motivation for studying the cooperation between IKBM and TINE SA can be explained by the following factors: the research project is a successful case and it is therefore a good opportunity to analyze the success factors and make it clear what improvements can be made by other U-I relationship. The proximity to the interviewees is profitable and it was easy to get access to the key informants.
In this study I used some theories elaborated by other researchers from their cases, as well as my own –elaborated model and other empirical material. It was interesting to see if their theory was supported by the empirical data found in my research. Each case of UIR is unique and it is important to be critical while analyzing data in relation to theory. This study gave me not only the opportunity to gain new theoretical knowledge through empirical research, but also the opportunity to develop the ability to look at the theory in a critical way.
I really hope that this paper will be of practical use both for IKBM and for TINE SA. This analysis could also be interesting for other actors who wish to explore the case of UIR.
1.2 UMB (IKBM) and TINE- general overview
Today the research cooperation between TINE and IKBM is a solid and complicated system and involves many actors. The cooperation is organized as collaboration between TINE and Food Alliance which includes UMB and research institute –Matforsk (today‟s name- NOFIMA). A short description of each actor will be given in the following chapter.
TINE BA is a cooperative dairy company with a high profile on research and innovation. The company is highly concentrated on conducting full and advanced research with the intention to obtain innovative, healthy and quality products.
Dairy industry is imposed today under the circumstances when it needs to innovate faster than before. It is in constant search for better, cheaper, more convenient and more natural ingredients with improved functional properties. An optimal use of milk and milk constituents
1 Elmuti, D., Michael Abebe, M., Marco Nicolosi. 2005. An overview of strategic alliances between universities
and corporations. Journal of Workplace Learning, Vol. 17 Iss: 1/2, pp.115 - 129
9 produced in Norway is an ultimate goal for the dairy industry. The company needs to innovate because of following reasons2;
a) Norway is a high cost country and innovation is a good tool in order to develop attractive products that can command high price;
b) Changing globalization trends impose new challenges on the dairy industry in Norway;
c) Consumers‟ preferences are changing and their desire for more diversification drives the power of innovation;
d) A stronger focus on health in the modern world creates new challenges for the dairy industry;
These trends may lead to more intensive research and development concerning manipulation of milk fat composition from a nutritional aspect, for instance through more thorough investigation of the influence of pasture of different qualities on the milk fat composition and on the properties of dairy products. The influence of breeding and feeding regimes on the content of various bioactive components in the milk may be studied in more dept, and the development of low fat and low energy products and products categorized as functional foods may gain increased attention. Increased research for optimal use of the various component in milk and by-products from dairy production will take place3.
TINE itself defines innovation, research and development as main areas in the firm‟s strategy.
TINE focuses sharply on developing and implementing new technologies which increase the utilization of milk. Tine works along with the entire value chain with innovation, value and quality assurance. TINE makes the use of research for further raise the degree of innovation and gives consumers the opportunity to choose a healthy food. The R&D center for TINE is located in two places: TINE dairy Kalbakken in Oslo and Måltidens Hus (MH) in Stavanger.
2 Abrahamsen R., Johansen A. G., Selmer-Olsen E. 2008. Cooperation with a university as a component of innovation in a dairy industry. Norwegian experiences. Warszawa, pp.243-257.
3 Abrahamsen R., Johansen A. G., Selmer-Olsen E. 2008. Cooperation with a university as a component of
innovation in a dairy industry. Norwegian experiences. Warszawa, pp.243-257.
10 Tine‟s expertise makes the company a key partner for other research companies in Norway.
TINE participates in more than 30 research projects with external partners4.
TINE has collaboration with UMB, NOFIMA, SINTEF (multidisciplinary research group with international expertise in technology, medicine and social sciences), University of Oslo, Akershus University College, University in Stavanger, as well as they do some studies in Tromsø and NTNU and some in Bergen. TINE collaborates with University of Oslo on the area of food science. With Akershus University College TINE works on the area of cost studies. TINE has also done some studies in collaboration with Tromsø, NTNU and Bergen on the area of how the products effect human health. Collaboration with the University of Stavanger has been on the topics related to new processes, especially those not related to the traditional dairy processes, as well as on the consumer area, consumer taste and sensory (data is based on the interview with TINE research chief Johanne Brendehaug).
An important role in TINE‟s research policy plays the cooperation with Food Alliance. The alliance was established on the 1 of January 2000 and it includes UMB and Matforsk (NOFIMA) which is also partly situated in campus Ås.
NOFIMA is a business –oriented group that conducts research and development activities for aquaculture, fisheries and food industry. NOFIMA includes 4 areas5:
1. Nofima Marin: Conducts research, development, innovation and knowledge transfer for the national and international fisheries and aquaculture industries. The core areas are breeding and genetics, feed and nutrition, fish health, efficient and sustainable production, process and product of seafood and marine bioprospecting.
2. Nofima Food: Provides research and consulting in food processing. Nofima Food works for better food quality, raw material utilization and nutrition. The core areas are raw material quality and process optimization, safe and sustainable food, consumer research and sensory analysis, food and health, industrial gastronomy and innovation.
3. Nofima Ingredients: Nofima Ingredients is engaged in research and pilot production services of the ingredients, food and pharmaceutical industries. The core areas of knowledge is the raw material, byproduct utilization, diet and nutrition and processing of ingredients and feed.
4http://ny.sunniva.no/site/41/om-tine/innovasjon/256383.cms?var-tradisjon-er-a-fornye-oss
5 http://www.nofima.no/om-nofima
11 4. Nofima Market: Provides economic analysis, perspective and foresight analysis, consumer research, market analysis and strategic consulting. It also works with information logistics.
The group has its head office in Tromsø, while the research activities are conducted in six different locations: Ås, Stavanger, Bergen, Sunndal, Averøy and Tromsø. NOFIMA in cooperation with industry partners and their trade organizations is delivering internationally recognized research and solutions that provides competitive advantage along the entire value chain6.
TINE had some projects with NOFIMA in marine as well they had some studies on fruits, berries and antioxidants. TINE had some projects with NOFIMA on the area of process methods, consumer testing methods, statistical treatments of projects which the focus on the management of dairy processes (data based on the interview with TINE research chief Johanne Brendehaug).
The purpose of the strategic alliance (TINE and Food alliance) is to increase the quality and scope of the research, raising the level of education and better education in the food area. In turn this will contribute to a competitive Norwegian food industry. The parties in the alliance shall be responsible for candidate and doctoral education in the food area and to promote and sell commissions and consulting business focused on the food industry7.
For Food Alliance the cooperation is essential in order to ensure the best possible transfer of expertise from the academic activities and research to TINE. It is essential that the NHL (UMB) and Matforsk (NOFIMA) get a quick and specific feedback from the dairy industry on how they should evolve in order to be useful for TINE. This applies both the development of candidates for higher education. It is about signalizing clearly what areas of expertise are important to them and about that TINE helps to develop them8.
UMB claims that through Food alliance UMB gets for their clients technical resources and infrastructure institutional boundaries. Alliance means that the food environment at UMB will be a major player in the international context of research and UMB hope therefore that they can become an even more attractive project partner. The collaboration is helping to coordinate
6 http://www.nofima.no/om-nofima
7 http://www.umb.no/matalliansen/artikkel/strategisk-allianse
8 http://www.umb.no/forsiden/artikkel/utvikler-forskningssamarbeidet-med-tine
12 and strengthen efforts in both research and education in the food area. Now the alliance includes 350 specific scientists and technical personnel. Food alliance is one of the largest research institutions in Europe within foodstuffs9.
1.3 The structure of the paper
In the first part of the paper the research topic was presented. The main purpose of the study is to describe the scientific research cooperation between IKBM (Dairy Department) and TINE SA and answer on the following questions: how the cooperation is organized and what are the reasons for the success of this research cooperation. The first part of the paper gave also a description of the background for the choice of the topic and the general description of TINE‟s research strategy and Food Alliance.
In the second part of the paper the description of the theoretical framework will be given. A theory on the topic of knowledge-based economy, innovation policy in Norway, as well as an own-created model called University-Industry Relationship Schema will be described. The model University-Industry Relationship Schema will be used in order to describe the relationship between IKBM and TINE SA.
In the third part the description of the method used for the data collection will be presented.
This paper presents an explanative case study. The data were collected by the use of qualitative method. The data was gathered through 4 semi-structured interviews. Challenges and lessons learned from the interviews will also be discussed in this part.
The forth part will present the results of the explanative case study, as well as analysis of the presented results. The analysis of the results will be related to the University-Industry Relationship Schema which will be presented in the second part.
In the fifth part the conclusion of the material discussed in part four will be presented.
9http://www.umb.no/matalliansen/artikkel/strategisk-alliansen
13
2.0 Theoretical framework
2.1 Introduction of the theoretical framework
This part of the paper will give the description of the theoretical framework which will be used in order to get an overview over both how the research cooperation between TINE SA and IKBM functions and what are the success factors of this cooperation. First, the description of the term”Knowledge-based economy” will be given, as well as the role of knowledge based economy in OECD countries will be discussed. Norwegian innovation policy will be also shortly described. Afterwards, the following model will be used for the explanation of the problem: own –created model “University-Industry Relationship Schema”
which is based on the University –Industry Evolutionary Schema elaborated by M. Feldman and A. Link in their article “Innovation policy in the knowledge-based economy.”
2.2. The subject of knowledge-based economy and its characteristics
Capitalism is undergoing an epochal transformation from a mass production system where the principal source of value was human labor to a new era of „innovation-mediated production‟
where the principal component of value creation, productivity and economic growth is knowledge 10.
The knowledge economy emerges from two different forces: the rise of knowledge intensity of economic activities, and the increasing globalization of economic affairs. The rise in knowledge intensity is being driven by the combined forces of the information technology revolution and the increasing pace of technological change. Globalization is being driven by national and international deregulation and by the IT related communications revolution11.
10Muntean M., Manea L. 2009. The knowledge economy. Munich Personal RePec Archieve
11 Muntean M., Manea L. 2009. The knowledge economy. Munich Personal RePec Archieve
14 Knowledge –based economy can be characterized by the following tendencies12:
IT revolution. Digitalization, open system standards, and the development software and supporting technologies for the application of new computing and new communications systems, memory and storage technologies, display systems and copying technologies-are now helping users to realize the potential of the IT revolution. In economic terms, the central feature of the IT revolution, is the ability to manipulate, store and transmit large quantities of information at very low cost. Because of the marginal cost of manipulating, storing and transmitting information is virtually zero, the application of knowledge to all aspects of economy is being greatly facilitated, and the knowledge intensity of economic activities greatly increased. The diffusion of knowledge is accelerated at a lower cost.
Flexible organization. Flexible organizations increase the productivity of both labor and capital by integrating “thinking” and “doing” at all levels of their operation. In doing so, they eliminate many layers of middle management, which are dysfunctional in terms of information flow. Flexible organizations also avoid excessive specialization by defining multi tasks responsibilities and by using team work and job rotation.
Knowledge, skills and learning. Information and communication have reduced the cost and increased the capacity of organizations to codify knowledge. As access to information becomes easier and less expensive, the skills and competencies relating to the selection and use of information becomes more crucial, and tacit knowledge in the form of skills needed to handle codified knowledge becomes more important than before.
Innovation and knowledge network. The knowledge economy relies on the diffusion and use of knowledge, as well as its creation. Hence the success of enterprises, and of national economies as a whole, will become more reliant upon their effectiveness in gathering, absorbing and utilizing knowledge, as well as its creation. Firms must become learning organizations, continuously adapting management, and skills to accommodate new technologies and grasp new opportunities. They will be increasingly jointed in networks, where interactive learning involving creators, producers and users in experimentation and exchange of information drives innovation.
12Muntean M., Manea L. 2009. The knowledge economy. Munich Personal RePec Archieve
15 Learning organizations and innovation systems. In the knowledge –based economy, the firms seek linkages to promote inter-firm interactive learning, and for outside partners and networks to provide complementary assets. As the firms develop new products and processes, firm determine which activities they will undertake individually, which in collaboration with other firms, which in collaboration with universities and research institutions, and which in the support with government. Innovation is thus the result of numerous interactions between actors and institutions, which together form innovation system.
Clustering in the knowledge-based economy. Networks and geographical clusters of firms are a particularly important feature of the knowledge economy. Firms find it increasingly necessary to work with other and institutions in technology-based alliances, because of the rising cost, increasing complexity and widening scope of technology.
2.2.1 Knowledge economy and OECD countries
The term “knowledge-based economy” results from a fuller recognition of the role of knowledge and technology in economic growth. Knowledge, as embodied in human beings (as “human capital”) and in technology, has always been central to economic development.
But only over the last few years has its relative importance been recognized, just as that importance is growing. The OECD economies are more strongly dependent on the production, distribution and use of knowledge than ever before13.
Countries, which are members of OECD (Organization for the economic cooperation and development) have acknowledged the importance of the “production” of new knowledge for the future economic growth. In their innovation policies a great role is devoted to the maintenance and development of the national innovation systems. OECD economies are increasingly based on knowledge and information. Knowledge is now recognised as the driver of productivity and economic growth. As a result, there is a new focus on the role of information, technology and learning in economic performance14.
In the knowledge-based economy, firms search for linkages to promote inter-firm interactive learning and for outside partners and networks to provide complementary assets. These relationships help firms to spread the costs and risk associated with innovation among a
13The knowledge-based economy. Organization for economic co-operation and development, Paris 1996.
14The knowledge-based economy. Organization for economic co-operation and development, Paris 1996.
16 greater number of organizations, to gain access to new research results, to acquire key technological components of a new product or process, and to share assets in manufacturing, marketing and distribution. As they develop new products and processes, firms determine which activities they will undertake individually, in collaboration with other firms, in collaboration with universities or research institutions, and with the support of government15. In the knowledge-based economy, the science system must balance not only its roles of knowledge production (research) and knowledge transmission (education and training) but also the third function of transferring knowledge to economic and social actors, especially enterprises, whose role is to exploit such knowledge. All OECD countries are placing emphasis on developing linkages between the science system and the private sector in order to speed knowledge diffusion. As a result, incentives are being given by governments for universities and laboratories to involve industrial partners in the selection and conduct of their research activities16.
In the case of higher education, university-industry collaborations bring with them opportunities to increase the relevance of the university's educational mission and to stimulate new research directions. They provide a means both for the efficient transfer of economically useful knowledge and for advanced training in skills required by industry. Traditionally, much of the knowledge produced in public facilities and universities has been prohibited from being patented by the private individuals involved in creating it, and salaries and equipment have been paid out of public funds. Now, joint research projects and other linkages are calling heightened attention to economic issues such as exclusive licensing, intellectual property rights, equity ownership, conflict of interest, length of publication delays and commingling of funds17.
15 The knowledge-based economy, Organization for economic co-operation and development, Paris 1996.
15http://www.oecd.org/dataoecd/51/8/1913021.pdf
17 2.2.2 Short overview over the innovation policy in Norway
When it comes to university-industry issues in Norway, the Norwegian Parliament statement number 7 (2008-2009) called “An innovative and sustainable Norway” gives the description of the main guidelines for innovative policy in Norway. The statement includes the desirable description on how the interaction between the academy and industry actors should be realized in a best effective way.
It is only when businesses or government agencies are using research results that it becomes important for the process of value creation. Business collaboration with universities, colleges, research institutes and health authorities is important in order to promote innovation in business. Business sector can be a demanding customer while facing the research environments. The quality and extent of the interaction is of great significance for the innovation in Norway18.
Universities and colleges play an important role in the innovation system in Norway. The institutes contribute to a link between academic knowledge and business communities and to the development, transfer and dissemination of new knowledge. Basic research is one of the universities‟ primary tasks. Another primary role for the Norwegian universities and colleges is to educate candidates for the relevant businesses and management. Universities and some colleges conduct research on the international level and contributing to innovation and value creation in a number of ways, for example through contract research. In addition, the dissemination of research findings is their primary task. The social mission of institutions of higher education and their primary tasks have received increasing attention in the recent years. The restricting of the funding in 2002, where the performance –based component has been introduced, premieres the effective education of graduates and the research on high level. Indirectly, this has significance for the institutions‟ interaction with private sector and their contribution to innovation and value creation. Institutions are those who do the most of publishing and who have most connections with business. In the recent years there also has been placed an importance on encouraging state colleges to increase their research activities and role as a regional innovation actors. Then management of institutions and goal structure
18St.meld. nr.7 (2008-2009).Et nyskapende og bærekraftig Norge.
18 changed to emphasize knowledge institutions‟ social mission and encourage more efficient commercialization of research. Knowledge environment in and around universities and colleges are central for the development of joint projects19.
There are several political mechanisms which support university –industry relationships in Norway. Those are the following20:
1. Programs in the Research Council of Norway (Forskningsrådet). Its main task is to serve as an advisory body on the research issues, give recommendations on national priorities, funding of the projects in relation to the needs for innovative policy.
2. The organization Innovation Norway includes expertise and other “cluster” support mechanisms, innovation projects and various initiatives oriented towards SMEs.
3. Infrastructure support in the industrial development agency SIVA, which supports 18 incubators, 18 regional “knowledge parks”, 9 investment companies, 8 research parks and more.
4. Industrial and public development contracts, which is support for R&D in SMS‟s related to the procurement by public agencies or large companies.
5. Tax deduction for private actors who work with R&D. The deduction is doubled if the enterprise works with an “approved research institution” – including all Norwegian, some foreign universities, colleges and research institutes.
6. Other support mechanisms include EU support of the research programs in Norway.
It is known that the two sectors experience from time to time difficulties on collaborating with each other. It is difficult to get an official statistics over what exactly doesn‟t not function well in the specific collaboration projects between universities/colleges in Norway and their industry partners, because each case needs to be scrutinized in order to find out positive and negative sides of the relationship between academia and industry.
Based on the Report from the seminar about research-driven innovation in Bergen (desember 2009) –called “Bridge over troubled water” we can get an overview over what challenges both sectors have in the research-driven innovation seen from both sides, also in the international perspective. There were in all 90 participants: 20% were from industry, 15%
19St.meld. nr.7 (2008-2009).Et nyskapende og bærekraftig Norge.
20 Gulbrandsen, M. and Nerdrum, L. University-Industry Relation in Norway. NIFU STEP, Oslo. Version of 23.07.2007
19 were from research institutes, 30 % were from college institutions and the rest of participants were from public sector and other agencies. There were representatives both from Norway, USA and England. On the seminar the differences of “interests” in the collaboration were discussed. It is a known fact that the industry has focus on earning profits, while universities are having more long term perspective especially when it comes to basic research and which is a driver in the research –based innovation. The point of the discussion was to bring to the audience the problematic aspects of the relationship between academia and industry.
The seminar has summed up that the barriers for the industry on the communication with academia are the following21:
Time aspect in the industry: short time horizons, the ability for quicker changes is getting more important, the projects are terminated as they begin to give positive results
Financing: The industry doesn‟t longer have “deep” pockets
Resources: There are few researchers and engineers for the cooperation with partners and few personnel for implementing new results.
IPR: immaterial property rights
Conflicting aims: the industry focuses on fixing the specific problems and is satisfied with
“just fix it”. Academia is getting easily captivated into the “curiosity-driven” research.
Academia should take into consideration the following points while interacting with industry:
They should be understood by another part that “it is a long canvas to bleach”
They should deliver the results according to schedule, and review and revise the plan and report in case of deviations from the milestones
They should recognize that is it problematic to implement tasks on short notice
They should know that is a great advantage to know technical terms and terminology of the industrial partner the academia work with
They should be able to say no
They should understand that if you want to be rich, than you have probably chosen a wrong carrier.
21http://www.michelsencentre.com/doc//PDF%20dokumenter/CMR-10-A11011-RA-01- MIMT_Seminar_Industry_Science_2009-12-08.pdf downloaded 06.04.11
Report from the seminar ”Bridge over the troubled water” about the research- driven innovation in Bergen, 2009.
20 These conclusions help us to get a good overview over academia-industry relationship. Both parts need to find a common language and should adjust to each other‟s cultures in order to obtain positive results.
2.3 Strategic alliance between industry and academy and its characteristics (University-Industry Relationship Schema)
The concept of the strategic alliance is a relatively new concept in Europe in terms of the relationship between universities and industrial partners. The characteristics of such an alliance are that it will be a long-term relationship across a number of the university departments or disciplines, usually beyond the life of single research project. The alliances are open ended with no limitations on what sort of interaction might be involved so that it can include staff exchange, undergraduate recruitment, and student prices or endowments. An open negotiation is fundamental in getting an alliance to work and must proceed from a position of mutual trust toward an agreement for mutual benefit. Such mutually beneficial agreements do not follow automatically from the signature on an agreement. Rather, they take a considerable amount of work on both sides to stimulate and refresh the interaction. When they work, the benefits are substantial to both sides because the process builds a relationship that has a broad base within both the industrial organization and the higher education institution and a degree of interdependence founded on respect for what each party brings to the relationship, which makes it more than the relationship of a provider and a customer22. In order to describe the strategic alliance between IKBM and TINE SA I have chosen to elaborate my own model based on the model University –Industry Relationship Evolutionary Schema elaborated by M. Feldman and A. Link in their article “Innovation policy in the knowledge-based economy.” Each case of the cooperation is unique and it was therefore difficult to find a universal model which could suit to my specific case of study. I had to elaborate my own model which could show how the cooperation between IKBM and TINE SA is organized and what are consequently the success factors of this research alliance. The model will be presented below as Figure 1: University-Industry Relationship Schema. The original model created by M. Feldman and A. Link describes shortly University environment and Industry environment and the “transactions” between them. The transactions named in
22 http://www.ncbi.nlm.nih.gov/books/NBK45046/
21 their article are the following: sponsored research, licences, spin-off firms, hiring students and serendipity.
After I studied a number of papers which describe different aspects of University- Industry cooperation, I felt that there is a need for adding to the model some significant “boxes” which would fulfill the model for UIC. I felt that the transactions mentioned in the original model of M. Feldman and A. Link were not complete and I therefore added an extra number of
“transactions” to the model.
The first box added to the model is called organizational factors and it describes practical organization of the research collaboration. The second “box” is called University –Industry Relationship Alternatives and it describes different types of knowledge transfer channels between the two partners. The third box added to the model is called psychological factors and it gives the description of the psychological aspects which play a significant role in the research collaboration. I felt that in order to get a complete picture of the IUC these three
“boxes” are of significant importance. Organizational factors represent such aspects as structural organization (description of the departments involved in the cooperation from both sides), practical organization ( physical facilities), funding (different sources of funding), personnel (people involved in the cooperation) and contracts. University Industry Relationship Alternatives are needed in the model as they describe multiple channels of interactions between the actors, such as for example formal and informal channels of communication. Psychological factors are of extreme importance, especially for my case study, as these are the underground of the reasons for success in the research cooperation between IKBM and TINE SA. Psychological factors include mutual understanding, trust, commitment and good personal relationships.
Additionally, I added to the original model two “boxes” -managing the “cultural” gap and the description of the reasons for success. The first one is not particularly significant for my case study, as the two actors are known for having little “trouble” with understanding each other.
Anyway, it is important to pay some attention to the description of the cultural gaps as it is something other UIC actors do not always manage in their relationships. The reasons for success, on the contrary, is the “box” which depicts the second part of the research question of this paper. The reasons listed in the “box” came up as the result of the analysis of the historical papers and interviews. The reasons for success are the consequences of the specific
22 mix of organizational and psychological factors. The model gives the description of multiple factors which influence the research cooperation between academia and industry, but I chose to concentrate my research around the University Industry Relationship Alternatives, organizational and psychological factors, as well as on the analysis of the reasons for success.
The model University –Industry Relationships Schema will be presented on the next page.
23
Figure 1: University –Industry Relationships Schema
Governmental policy
Exogenous Shift Strategic Response and Parameters Learning
IIn
Behavioral Attributes Strategic response and
Loyalties Opportunism and Learning
University Environment Formal rules: Incentives and rewards
Informal rules: Standard Operating Procedures, norms
Firm Characteristics -Industry characteristics -Firm objectives -Firm size/capabilities -Firm research base Individual
Researcher
2.U-I Relationship alternatives:
a) Research support b) Cooperative research c) Knowledge transfer: formal and informal interactions d) Technology transfer 1.Organizational
factors:
a) Structural organization, research topics, types of research b) Practical organization (physical facilities) c) Funding.
d) Personnel e) Contracts
4.Reasons’ for success a)Historical reasons b) Good project management c) Strong personal relationships
d) Strong research base at both actors
e) Clear understanding of each others‟
environment and needs f) Trust and no hidden agendas
g) Flow of graduates h) Clear policy on publication and IPRs 3.Psychological
factors:
a) Mutual understanding b) Trust c) Commitment.
d) Good personal relationships
5. Managing the
”cultural gap”
a) Cultural differences b) Differences in objectives
c) Other external factors d) Other external factors
24 In the following a more detailed description of the model will be given.
1.Organizational factors
By organizational factors is meant a practical organization of the cooperation: a) structural organization (departments involved in the cooperation from both sides) b) practical organization (the use of physical facilities) c) funding of the projects, d) personnel exchange and e) contracts between the partners.
2. University-industry relationship alternatives
University Industry Relationship Alternatives encompass 4 types of U-I interactions: research support, cooperative research, knowledge transfer and technology transfer. These four types of interactions can characterized as following23:
a) Research support
Research support is the least interactive of the four I/U relationship components since research support embodies financial and equipment contributions made to universities by industry. Financial and equipment contributions can be unrestricted gifts or endowment trust funds that the university uses to upgrade laboratories, provide fellowships to graduate students, or provide seed money for promising new projects. In the past, industry often contributed large amounts of unrestricted funds and equipment for university research . Industry support for university research is now more targeted and often tied to specific research projects that pay dividends by providing industry with knowledge and new
technologies for the long-term.
b)Cooperative support
Cooperative research relationships are more interactive than research support and include contract research with individual investigators, consulting by faculty, and certain group arrangements specifically for addressing immediate industry problems.Contract research with individual investigators and consulting are the most frequently used types of cooperative research and usually involve one faculty member working with a single firm on a targeted
23Santoro, M., Chakrabarti, K.. Firm size and technology centrality in industry –university interactions.
Research Policy 31 (2002) 1163-1180
25 research project. Group arrangements involve more than just one faculty member and more than just one industrial firm. Here, the firm works with the university research center‟s faculty and staff through industry advisory boards and center-sponsored research seminars so the firm can pursue a specific initiative through a formal network with a coordinated research agenda.
c) Knowledge transfer
Knowledge transfer encompass a much broader array of highly interactive activities that include on-going formal and informal personal interactions, cooperative education, curriculum development, and personnel exchanges. Formal and informal channels of interaction will be described more detailed in the next chapter. The division into informal and formal channels is based on the material from the article written by F. Romero “University- Industry Relations and Technological Convergence.” The majority of UIR interaction mechanisms are established through the informal channels. Those are the following: joint publications (IPR issues), conferences, informal meetings, personal interactions, flow of graduates to the business sector, joint supervision of Master degree dissertations and lectures by industry members at universities. The formal channels include: R&D contracts, licenses, spin-offs and joint labs. The model describes how formal and informal mechanisms function and demonstrates the following tendency: the more formal is the channel of communication, the higher is the tacitness and novelty of knowledge and the effectiveness of technological convergence. Tacit knowledge is the knowledge that is not clearly articulated. It resides in the peoples‟ skills and actions. Another word for tacit knowledge is know-how.
This continuum of collaboration mechanisms can be conceptualized in terms of the degree of novelty in the knowledge that is being transferred. On one extreme, the mechanism of graduate flows can be interpreted as the transfer of mature, codified knowledge. In the other extreme the research joint labs encompass the transfer and the creation of knowledge with a high degree of tacitness. These mechanisms can be related to technological convergence and integration. Convergence and integration are, by nature, activities that require a high degree of novel knowledge and noel approaches. As such, in principle, the forms of industry-university relations more conducive or more appropriate in terms of effectiveness of convergence and integration would those that involve a high degree of tacitness and knowledge novelty24.
24 Romero, F. University-Industry Relations and Technological Convergence”. PICMET 2007,pp.233-240
26 d)Technology transfer
Technology transfer is the fourth I/U relationship component and like knowledge transfer also involves a number of highly interactive activities. Compared to knowledge transfer the focus here is on addressing immediate and more specific industry issues by leveraging university driven research with industry expertise and parlaying these complementary contributions into commercialized technologies needed by the marketplace. Often the university research center provides both basic and technical knowledge along with technology patent
and/or licensing services while the industrial community provides knowledge in a specific applied area along with a clear problem statement related to market demand .Technology transfer occurs in many ways such as through technological consulting arrangements, the firm‟s use of center sponsored extension services, and jointly owned or operated ventures.
Joint ventures usually represent large-scale commitments by both the firm and university to transfer technologies and are often based on successful prior relationships between the firm and the university research center.
3. Psychological factors
Psychological factors include a) mutual understating between the partners b) good personal relationships c) trust and d) commitment. Good communication between the partners is a key factor when it comes to the effectiveness of the cooperation. If the partners have the atmosphere of mistrust and doubt, the cooperation might dissolve without giving any positive results.
Communication is the process through which the information is transmitted, participatory decision-making is prompted, activities are coordinated, power is executed and the existence of commitment and loyalty between the organizations involved in the cooperative agreement is encouraged. Commitment can be defined as the extent to which the partners get involved in the inter organizational relationship. The higher the contribution of resources, the managerial support and the involvement of the rest of the stuff, the higher is the partner‟s degree of commitment. Commitment means also emotional involvement in the cooperation and is derived from the satisfaction from the relationship. Trust can be defined as the willingness to believe in other part within a context where the actions taken by one part make the other
27 vulnerable. Trust is a very important factor in the cooperation and is a matter of vital importance in the future development of the relationship and contributes to its success25. Trust, commitment and good personal communication can be covered by one concept called social capital. Social capital can be defined as “the features of social organization, such as trust, norms and networks, that can improve the efficiency of society by facilitating coordinated actions26.” In order for trust to be developed between the partners, social capital need to be developed and regular communications that are open and honest and are based on social interactions are essential in this regard. Social capital between the collaboration partners can be built through a number of different activities, such as regular dialogue and meetings as well as attendance of collaborators at events that are hosted by the other partner, e.g. lectures, seminars. Social capital extends beyond the need for social interactions and building of trust; it also pertains to the need for the collaborators to essentially “speak the same language”27.
4. Success factors
Success factors described in the model are specific for this case study. They came up as a result of the analysis of U-I Relationship Alternatives, as well as of organizational and psychological factors. After the ground analysis the success factors of this research cooperation was defined as following: a) historical reasons, b)good project management, c)strong personal relationships, d) strong research base at both actors, e)clear understanding of each others‟ environment and needs, f) trust and no hidden agendas, g) flow of graduates from the university to the firm, h) clear policy on publication and IPRs.
5. Managing the “cultural “gap
There are numerous situations where a university and a firm have formed an alliance to solve a problem that was important to the company and interesting to work with for the researchers.
25 Mora-Valentin, E., Montoro-Samchez, A., Guerras-Martin, L. Determining factors in the success of R & D
cooperative agreements between firms and research organizations.28th EIBA CONFERENCE, December 8- 10,2002, Athens, Greece
26 http://www.caledonia.org.uk/soc_cap.htm downloaded 13.04.11
27 Philbin, S. 2008. Process model for university-industry research collaboration. European Journal of Innovation Management, Vol. 11 Iss: 4, pp.488 - 521
28 However, these alliances don not always achieve the desired objectives because of some reasons discussed below.
a) Cultural differences
The two partners have essentially different goals, time approaches, languages and assumptions. Institutions of higher education are involved in creating and spreading knowledge, while companies produce products and services in a highly competent business environment. Companies do not typically comprehend how work is allocated in universities and how university budgets are handled. University partners, on the other hand, do not understand the real market forces, time demands, and the incentive structure of the firm.
b) Differences in objectives
The very nature of the final objectives of these two institutions is dissimilar. Most companies insist on applied research that results in a marketable product or service along with new innovative processes or approaches to problem solving. The university or faculty member uses basic research more often to work towards contributions to knowledge in the form of new concepts, models, empirical findings, measurement techniques and other related objectives.
c) Other external factors
Organizations operate under a variety of external unexpected changes and internal readjustments like reorganizations and corporate downsizing. Since many alliances between higher educational institutions and corporations are involved in researching fundamental problems that are expected not be resolved in the very short term, projects are undertaken within a long –term research. Alliances need a long timeframe and commitment in order to ensure stability to support work in long –term research.
d) Other problems in strategic alliances
Several reasons are also given for the under-performance and failure of strategic alliances.
The most common reasons include a break down in trust, a change in strategy, the value did not materialize, the cultures did not mesh very well and the systems were not integrated.
Other reasons might be lack of knowledge about the partner and his processes, insufficient project management, lack of acceptance of results from the cooperation partner. While there are natural synergies in corporate-university alliances, there are also areas of likely conflict.
29 Universities have their own public roles and expectations (i.e. they are mandated to create and disseminate knowledge for the broad benefit of society). They are also expected to make knowledge freely and widely available through education and publication as they enjoy non- profit, tax free status and receive public funding. On the other hand, corporations survive in contested market places where they compete for customers and other investors. They need advantages over their competitors in order to provide growth and profits to their owners and employees. The need for competitive advantage extends to the corporation‟s requirement for a relevant return from university research investments that can, for instance, be effectively commercialized in the market place28.
2.4. Summary of the theoretical framework
As it was said before, the topic of university –industry relationships is yet not very well studied, and it was therefore problematic to find a model and a theory generally which could suit to my specific case. I had to make my own model which could best suit to my specific case of study. I have based on the model of F. Romero “University-Industry Evolutionary”
and have added extra elements which were important for the explanation of the research collaboration between TINE SA and IKBM.
28 Elmuti, D., Michael Abebe, M., Marco Nicolosi. 2005. An overview of strategic alliances between universities
and corporations. Journal of Workplace Learning, Vol. 17 Iss: 1/2, pp.115 - 129
30
3.0 Method
In this chapter a method used for answering the research question of the paper will be presented. In the following chapter the arguments on why exactly the qualitative analysis was chosen for the research topic will be given.
The choice of the method depends on the type of the research question. The choice of the research design was not a complicated question, because the research question itself “dictated”
the choice of the design. The research question of this paper is the following:
The literature describes two types of paradigms a researcher can work with: positivism and interpretivism. The fist one is used to describe casual –effect relationship. The second one is used to explain peoples‟ actions based on their ideas. Those two can be related to quantitative and qualitative approach. The second one is used when a researcher wants to get deeper understanding of the phenomena. It is also usual to use it when the topic is not well researched and the researcher needs to explore more or bring a new theory. This research paper is aimed at getting an understanding on how the collaboration between the two actors is functioning, as well as at analyzing the success factors of this cooperation. This research is not aimed at getting a quantitative data on the phenomena, but is aimed at exploring how the cooperation functions. As it was mentioned before, the topic if UIC is yet not very well researched and qualitative approach would therefore be best appropriate for my research topic.
According to Mehmet Mehmetoglu (2004) qualitative method is best appropriate for the following research approach;
a) The research question is about “how and what” and is based upon the assumption that it is interesting to find out what is going on.
b)The research question is little explored from before and the researcher wants to know more about the phenomena and generate new theories.
Qualitative analysis of the successful research cooperation between IKBM and TINE SA: general description and reasons for success.
